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FG approves N21bn for provision of free meters

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prepaid metersThe Federal Government has approved N21bn under the Presidential Metering Initiative to close the country’s metering gap by providing meters to unmetered power users at no cost.

That was announced in an order by the Nigerian Electricity Regulatory Commission on Friday with the number – NERC/2024/072, titled “Order on the Operationalisation of ‘Tranche A’ of the Meter Acquisition Fund”.

The commission stated that the deployment of funds under the Meter Acquisition Fund scheme would accelerate the deployment of meters and close the current metering gap.

It added that this would help in reducing commercial and collection losses to power distribution companies, enhancing the quality of service, and improving customer satisfaction.

“The funds accrued as of the April 2024 market settlement cycle and available for procurement of meters under the first tranche of the MAF scheme is in the sum of NGN21,864,851,725. The commission hereby approves the use of a sum of NGN21,000,000,000 apportioned pro rata to contribution by the Discos as Tranche A of the MAF scheme,” NERC stated in the new order.

It said the fund was broken down and allocated to each Disco for the purchase of end-use customer meters.

“All the meters to be procured and installed under the MAF framework shall be at no cost to the customers of the Discos,” the power sector regulator noted.

The commission further said, “This order shall become effective on June 13, 2024, and may be amended or revoked by subsequent orders issued by the Nigerian Electricity Regulatory Commission.”

In ia bid to ensure the metering of power consumers, NERC introduced the Meter Asset Provider Regulations 2018 and subsequently, the Meter Asset Provider and National Mass Metering Regulations in 2021.

The regulations provided several options for metering customers but the interventions, though significant, have not resulted in the closure of the national metering gap, which currently stands over seven million customers.

The inability of distribution companies to raise financing in the form of debt or additional equity has been identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.

The Meter Acquisition Fund scheme was, therefore, developed and approved by the commission, primarily to address the challenge of Disco credit worthiness inhibiting the deployment of end-use meters in NESI by creating a credible revenue stream from the market funds on the back of which long term financing may be secured by the utilities.

The funds, according to NERC, shall be under the management of the fund manager based on terms and conditions negotiated by the Discos and approved by the commission.

The Federal Government approved the Presidential Metering Initiative to close the metering gap in the NESI within three years, leveraging smart metering technologies for data analytics.

The commission also approved the deregulation of meter prices under the MAP scheme vide order NERC/2024/040 to ensure on efficient pricing of meters while responding more quickly to changes in macroeconomic parameters.

The order provided that all prices of meters under the MAP scheme should be determined through a transparent and competitive bidding process by eligible MAPs.

“A competitive bidding process was held on May 21, 2024, based on the provisions of Order NERC/2024/040, where a total of 24 MAPs participated across the 12 Discos. A total of 44 bids were submitted for 10-meter specifications.

“While the NESI is expected to leverage on the revenue stream under the MAF framework to raise substantial capital funding for metering, there is an imperative to accelerate a closure of the metering gap for all customers currently classified under tariff Band A for revenue protection and facilitating demand side management for the affected customers,” NERC stated.

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